In a year of mega-deals impacting the security marketplace, one of the big news stories recently was a deal that did not happen – between giants Honeywell and United Technologies (UTC). Financial news pages have been full of the back-and-forth between these two companies. It seems Honeywell wanted to merge with UTC, but UTC declined because of “insurmountable regulatory obstacles and strong customer opposition.” So the deal is off, at least for now.
Impact on the security market
The deal, which could have resulted in a $160 billion conglomerate, involves many more business units than security, of course. United Technologies and Honeywell both operate in a long list of business categories. Some of them compete, which is the reason for possible antitrust (regulatory) concerns.
The security part of the puzzle isn’t even the largest, and yet such a merger could have a big impact on our industry, which has already been rocked by the Johnson Controls-Tyco and ADT-Protection 1 deals announced in the last month or so.
Although the merger is officially off, one wonders if some other scenario could surface. There are often questions in our industry about whether a large conglomerate is the best environment for security manufacturing and distribution businesses to thrive, or if they might better succeed in a different situation. The question becomes even bigger if the conglomerate doubles in size (and starts looking for ways to cut expenses to justify the merger to shareholders).
Honeywell emerged as a topic on the business pages in another context, too. The company is looking to sell its building-solutions business (which includes some of its security market presence), worth between $3 billion and $4 billion, according to one report. So at the same time they are trying to accomplish a megamerger (with UTC), Honeywell is looking to sell off one of its business units. The sprawling conglomerate is looking to become either bigger or smaller. This narrative, too, could play out any number of ways.
We need a scorecard to keep up with what’s going on among some of the security industry’s largest players. Who knows what will come next or when? Stay tuned.
Other acquisitions by Honeywell
Amid all this non-news are also some actual events: Honeywell announced the acquisition of RSI Video Technologies, a provider of intrusion detection with video verification sold under the Videofied product line. About a month ago, Honeywell acquired Xtralis, a provider of early fire and intrusion detection technologies. Both these businesses fit well with their security and fire portfolio and appear to build on their value to the market. David Paja, President, Honeywell Security and Fire, said the Xtralis acquisition “strengthens our offering for critical infrastructure and high-value assets."
It’s good to know they are building their security presence even as broader questions and corporate machinations grab the headlines.
